The Circular on SFC-authorised funds with exposure to virtual assets is Hong Kong Securities and Futures Commission guidance for investment funds seeking public offering authorisation in Hong Kong where exposure to virtual assets exceeds 10% of net asset value. The current version was revised on 27 May 2026 under SFC refNo 26EC31 and supersedes the 7 April 2025 version. It operates as agency guidance under the SFC authorisation framework in sections 104 and 105 of the Securities and Futures Ordinance.
The circular applies to SFC-authorised virtual asset funds seeking direct exposure to eligible spot virtual asset tokens or indirect exposure through regulated futures and other exchange-traded products. It does not apply to authorised fiat-referenced stablecoins or tokenised deposits, which the SFC addresses through separate UT Code FAQs.
Key requirements for SFC-authorised virtual asset funds
Management company and eligible assets
Management companies are expected to have a good regulatory compliance record and at least one competent staff member with experience managing virtual assets or related products. The circular limits direct and indirect exposure to tokens accessible to the Hong Kong public for trading on SFC-licensed virtual asset trading platforms.
Investment strategy and leverage limits
For virtual asset futures exposure, only futures traded on conventional regulated futures exchanges are contemplated, subject to liquidity and roll-cost assessment. Indirect exposure through other exchange-traded products remains subject to the UT Code and any SFC-imposed requirements. The circular states that SFC-authorised VA Funds should not have leveraged exposure to virtual assets at the fund level, and futures-based strategies are expected to use active portfolio management to address rolling and market disruption risk.
Transactions, custody and valuation
Spot virtual asset transactions and direct acquisitions should be conducted through SFC-licensed VATPs, or through authorised financial institutions or locally incorporated AI subsidiaries that comply with Hong Kong Monetary Authority requirements. The 2026 circular allows both in-kind and in-cash subscription and redemption for SFC-authorised spot virtual asset ETFs.
The trustee or custodian may delegate virtual asset custody only to an SFC-licensed VATP, an eligible authorised financial institution or subsidiary meeting HKMA custody standards, or another SFC-acceptable entity. Custody controls include asset segregation, predominant cold-wallet storage, minimised hot-wallet use, Hong Kong storage of seeds and private keys, restricted access, measures such as multi-signature or key sharding, and backups designed to reduce single-point-of-failure risk.
For spot virtual asset valuation, management companies should use an indexing approach based on trading volume across major virtual asset platforms. They should also confirm that administrators, participating dealers, market makers, index providers and other service providers are competent, available and ready to support the fund.
Disclosure, distribution and staking
Offering documents and product key facts statements must disclose investment limits and key risks associated with the fund’s virtual asset exposure. The circular identifies price, custody, cybersecurity and fork risks for spot virtual assets, as well as potentially large roll costs and operational risks for virtual asset futures. Management companies are also expected to carry out investor education before launch.
Distribution is cross-referenced to the SFC-HKMA joint circular on intermediaries’ virtual asset-related activities. For SFC-authorised VA Funds listed and traded on the Stock Exchange of Hong Kong, intermediaries may execute unsolicited on-exchange orders without applying some complex-product suitability and minimum-information requirements, but they should still conduct a virtual asset knowledge test. Off-exchange or unlisted distribution remains subject to suitability, warning-statement and knowledge-test requirements.
The current circular also addresses staking and other virtual asset-related activities. The SFC may allow these activities through SFC-licensed VATPs or, where applicable, authorised financial institutions or eligible subsidiaries. Management companies must assess consistency with the fund’s objective and strategy, manage risks and conflicts, conduct due diligence and monitoring, disclose activity limits and risks, provide prior investor notice for material changes, and report committed holdings, revenue and expenses.
Status and review
As of 17 June 2026, this profile treats the 27 May 2026 circular as in force as SFC agency guidance. Prior consultation with and approval of the SFC are required for funds seeking authorisation with more than 10% NAV exposure to virtual assets, existing SFC-authorised funds planning to cross that threshold, and SFC-authorised VA Funds intending to engage in staking or other virtual asset-related activities.